ISRG - Intuitive Surgical: Hope For A Resurgence In Operational Leverage

2024-05-22 08:29:35 ET

Summary

• Intuitive Surgical's management participated in a healthcare conference and provided forward-looking perspectives on the company's operating margins and procedure growth.
• Management now believes it's highly unlikely for the company to return to near 40% adj. margins in the near term.
• But, they also mentioned some plans to alleviate margin compression, and I believe they may target a 35-37% adj. operating margin range.
• Based on these assumptions, I have revised my valuation model, thus lowering my target price.

Investment Thesis

Management for Intuitive Surgical (ISRG) recently participated in Bank of America’s Healthcare conference last week. I found some of the commentary and forward-looking perspectives laid out by management particularly intriguing as they relate to my long-term outlook related to Intuitive Surgical....

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